What is an ICO and how does it work?

ICO has proven to be a revolutionary way for many companies and projects to raise money. ICO can be said as a combination of conventional methods and advanced techniques. The primary thing to consider is that investors who invest in ICOs will be 100% risk free due to the technology used.

So far, most ICO funds have been raised through Bitcoin (BTC) or Ether (ETH). During the execution of the ICO, the project produces a Bitcoin or Ethereum address for receiving funds and then displays it on the appropriate website. The procedure is the same as opening a bank account and then displaying it on a particular website to people so they can send money.

The initial coin offering (ICO) is basically an illegal way of raising group funding through different cryptocurrencies (fiat currencies in several cases) and it works for cryptocurrency organizations to raise the capital needed to carry out the project. In the ICO, a certain portion of a recently issued cryptocurrency is sold to investors in exchange for any legalized offer or any other cryptocurrency. It can be said as selling tokens or mass selling which involves taking the amount of investment from the investor and providing them with some characteristics related to the project being launched.

The IPO, or Initial Public Offering, is a process in some way related to the ICO in which investors receive shares owned by the company. While in the ICO, investors buy company coins that can increase value if the business increases.

The first sale of tokens, ie ICO, was conducted by Mastercoin in July 2013. Ethereum raised money through ICO 2014. In recent years, ICO has taken a completely new definition. In May 2017, it was approx. 20 offers, as well as Brave’s recent ICO web browser generated about $ 35 million in just 30 seconds. By the end of August 2017, starting in January 2017, a total of 89 ICO coins worth $ 1.1 billion had been executed.

Investors send Bitcoin, Ethereum or any other cryptocurrency to a given address, and then in return receive new tokens that can be of great benefit to them if the project is affected.

  • The ICO is basically implemented for projects based on cryptocurrencies that rely on decentralized technology. Therefore, naturally such projects would force only those investors who have a great interest in the concept of cryptocurrency and who are friendly to the technology used.
  • The document belonging to the investor really remains in the form of a website, white paper or web post. Some of these documents show accurate details about the project, while others literally falsify its characteristics in order to mislead those interested. Therefore, before relying on any white paper or e-document, it is better to go through a quality check.